Senator FIERRAVANTI-WELLS (New South Wales) (19:50): This evening we are debating another of the bureaucracies in the government's so-called health reform. The purpose of this legislation is to enact a funding body, the proposal for which has an interesting history. It was the funding body we were going to have under whatever the previous iteration, or one of the previous iterations, of so-called health reform was going to be. And then, as senators may remember, on the eve of the midwinter ball, in answer to a question on notice from me at the time of the inquiry into the reforms through the Senate Standing Committees on Finance and Public Administration, suddenly we had the answer delivered to us that the funding authority was no longer necessary. Indeed, Minister Roxon then, when asked a question in relation to it, told us:

It's not appropriate for us to - and we've made it very clear we don't want to increase the size of the bureaucracy - it's not appropriate for us to establish an authority where there is not a need to do so.

She went on to say:

There will need to be people who can process essentially the cheques that need to be paid through to … hospital networks, but it doesn't require an authority.

Funny about that! And yet here we are today considering this bill, the National Health Reform Amendment (Administrator and National Health Funding Body) Bill 2012, for a new bureaucracy that the government considered was necessary, then considered was not necessary, and now considers is necessary again. It speaks volumes for what has now become the soap opera of so-called health reform in this country. The unnecessary, until recently, funding body is just another one in the long line of bureaucracies. I will come to that in a moment. All of this, let us not forget, started when the member for Griffith as the then Leader of the Opposition in 2007 promised that he had a plan to fix the hospitals. Yes, the buck would stop with him, Senator Cormann. If his plan was not being achieved by mid-2009 Labor would hold a referendum to 'seek to take financial control of Australia's 750 public hospitals'. We know through our questioning at estimates that there was not a plan. There was not even a plan on the back of an envelope. I will come to then health minister Roxon's comments, which we saw in the leadership turmoil earlier this year and which provided a fascinating insight into the relationship between Minister Roxon and then Prime Minister Rudd.

I dusted off my shelf and for reasons of sentimentality decided that it was probably appropriate this evening for me to look at these various iterations once again. We had the blue book released in March 2010, A national health and hospitals network for Australia's future. That was the first blueprint. Then, before COAG, the sales pitch was the green book, A national health and hospitals network: further investments in Australia's health. That was the sales pitch before COAG. Then, of course, we had the red book from COAG, 19 and 20 April 2010, A national health and hospitals network for Australia's future: delivering better health and better hospitals. How many millions of dollars were wasted in producing all these books? Then we had the rather dubious yellow-coloured book, as we refer to it at estimates, Delivering the reforms. It sets out timelines, most of which have not been met. Look, I found a photo. Isn't that lovely? There is then Prime Minister Rudd and Minister Roxon happily posing for photographs. They might have been happily posing, but that is not how Minister Roxon was thinking. During the leadership turmoil she told us precisely what she was thinking about then Prime Minister Rudd.

Then we have in July 2011 the National Health Reform Agreement. Sorry, I missed 13 February 2011 and another iteration of it. Then we have the July 2011 National Health Reform Agreement. Then we have another iteration on 2 August 2011 and then in September 2011 yet another iteration of this debacle, this soap opera, that is so-called health reform in this country.

The leadership turmoil earlier this year provided, as I said, valuable insight into the government's chaotic decision making process on this major policy reform. We have Minister Roxon claiming that the process for considering health reform policy was often done without proper advice and it was, according to her, 'a ludicrous way to run government'. For example, the proposal for a referendum to take over the hospital system was in her words 'a cynical approach' and would have been 'a disaster'. Minister Roxon issued joint press releases with the member for Griffith, promoting a possible referendum as part of the government's policy. So, she is now telling us that the whole thing would have been a disaster, yet she was very happily posing for photographs with Mr Rudd, going from hospital to hospital. All it was was a photo opportunity. For all of this she has been promoted to be our Attorney-General. Incredible! Instead of being admonished, she has been promoted. That is why this area of policy needs very careful scrutiny.

I mentioned bureaucracies earlier, and the unnecessary—as I said, until recently—funding body is yet another in a long line of bureaucracies. I just want to list them for the record. It has only been 1½ terms and we have seen so far the establishment of the Australian Commission on Safety and Quality in Health Care, separate from the department and with a budgeted cost of over $35 million; then we have the National Health Performance Authority at a cost of over $118 million; we have the Independent Hospital Pricing Authority with a price tag of over $91 million; and we have Medicare Locals with funding of over $416 million. We still do not know what these Medicare Locals are going to do, because nobody can tell us what a Medicare Local is going to do. I had thought it was a place where you get a refund and a drink. That obviously is not what a Medicare Local is, but it has a price tag of $416 million. Then we have the Australian Medicare Locals Network. If we do not know what the Medicare Locals are going to do, we sure do not know what the Australian Medicare Locals Network is going to do—but it has a price tag of over $12.5 million. Then we have the Local Hospital Networks. In addition, we have got the Australian Preventive Health Agency and Health Workforce Australia. The government has proposed in this budget that the Aged Care Financing Authority and the Aged Care Reform Implementation Council be established. As far as my own portfolio area of ageing is concerned, this funding and this proposal for a funding authority have absolutely sent the industry into meltdown. About $3½ billion dollars of potential capital investment is on hold because of the uncertainty surrounding this government's action.

All that this gives us is enormous potential not only for duplication but for waste and overregulation. That will be the legacy of this government. This is the hallmark of their operation. Another $38 million has been allocated in the budget for the administrator and funding body. That is a pretty hefty price tag for somebody who is going to sit there and process cheques. When this was originally set up the then health minister, Ms Roxon, effectively told us that this bureaucracy was not necessary. She said that they did not want to increase the size of the bureaucracy. Remember Kevin Rudd's promise that there would be no net increase in the bureaucracy? I do not know how all these bureaucracies that are being created with price tags of millions and millions of dollars are not going to result in a greater level of bureaucracy in this country. Former health minister Roxon told us: 'No, no, we don't need another person; we don't need another bureaucracy that is essentially going to process cheques that are going to paid through the local hospital networks. No, we don't need another funding authority.' But we have it.

What is this body going to do? What is this funding pool which, according to the National Health Reform Agreement, comprises state pool accounts for each state and territory? The administrator is going to operate the pool. Apparently he is going to make payments to the states for public hospital services. The administrator is going to calculate and advise the Commonwealth Treasurer of the payments to the pool. Of course, the states will also pay their contribution into the pool for activity funded services. One can only imagine what the spaghetti map showing how all this money is going to go in and out will look like. It can only be described as a giant money-laundering exercise that will operate at huge expense to the Commonwealth and to the taxpayers of Australia.

The Independent Hospital Pricing Authority is meant to set the so-called national efficient price for hospital services and to determine which services are to be block funded as opposed to activity funded. The department, in its evidence to the Senate Community Affairs Legislation Committee, advised that the administrator in making the payments will need to know the number of services provided by each local hospital network and the efficient price of those services—but a national efficient price has not yet been established. On available evidence from the authority, activity based funding will initially be based on mean or median cost of a service rather than any notion of an actual 'efficient price'. This may have consequences for hospitals in terms of driving real efficiency and in ensuring the viability of best practice where providing quality service with good outcomes is above the median cost. There has also been little explanation of if, when, or how the system is to transition to a normative pricing model where 'efficient price' is properly defined. It has not been properly explained why another $40 million bureaucracy is required to process the payments when we already have an independent authority pricing the services.

We also do not know how this authority is going to interact and coordinate its responsibilities with other entities that have been prepared as part of this so-called health reform. It is interesting to see that this funding authority first of all was not necessary but now is. It is very clear from statements made at the time that the states ended up getting their way—they did not want this authority. Now that we are getting this funding authority it is very clear that the state health ministers have the upper hand, because they have a discretion over Commonwealth funds. Why have we gone through this tortuous process? Because Prime Minister Gillard wanted desperately to be seen to have actually brokered a deal. We now know a lot more about what was happening behind the scenes in relation to the process of so-called health reform when Prime Minister Rudd was at the helm. But as Ms Gillard said proudly in her doorstop on 24 February 2012:

... I have got big reforms done that languished under my predecessor.

Of course, she was talking about health reform. But when one looks at the various iterations of these agreements one sees that what started out as Kevin Rudd's grand plan to fix the hospitals has been watered down so that the states are still in control. It is business as usual. We have seen in the last few days reports that Tasmania is going to be bailed out. The Commonwealth government is now going to bail out the absolutely and utterly incompetent Tasmanian Labor government. There was the Premier offering to hand over control of the Tasmanian health system to the Commonwealth because it is such a shambolic system. Having spent some time down in Tasmania and having spoken to not only aged-care providers but also providers in other related areas, it is very clear that the Tasmanian government know absolutely nothing about running hospitals or their health system.

Here we have the states still in control. Have the emergency targets been met? No, they have not been met. They were never going to be met. Kevin Rudd and Nicola Roxon wanted the headline 'Four-hour emergency targets', but they are not going to be met. It will be very interesting to see whether payments will be made to the states for meeting those targets. I think that they will not be met because the states never had the intention of meeting any obligations. Ultimately, as the Victorian Premier said right up front back when we had the first iteration of the so-called health reform—he was quoted as saying this in the Australian—the states are still in charge. The states have always been in charge. They have always directed operations as far as this was concerned. All that the Prime Minister did was sign off on the latest iteration of a so-called health agreement where really the states are still in control because she wanted the Australian public to believe that her government was doing something on health reform.

At the last three or four estimates I have asked, 'What is the definition of a bed?' I still cannot get the definition of a bed or a bed-equivalent. This is the point we are at. Where is health reform in this country when this government cannot even work out with the states the definition of a bed? Quite frankly, it is little wonder that we are here this evening talking about another new bureaucracy. There are all these bureaucracies and no improvement whatsoever to the health system. (Time expired)